Carving out a niche or position is highly recommended as it allows you to position your marketing efforts on a clearly defined and less competitive market, than trying to take on the heavyweights with deep pockets head-on.
What is a Niche?
A niche or niche market is a segment within your target audience where you will spend the most time marketing your product or service. Why? Because this niche is going to help differentiate you from the competition. And it is going to save you money.
Let’s face the facts and realize that you are not the only person who is offering a product or service like yours. In fact, in most cases, there are probably 3 to 5 other businesses doing exactly what you are doing. If you are marketing online, there could be thousands. Your customers are being swarmed with marketing messages every day. They are confused by whom they should do business with, and choosing a niche will help you break through that confusion.
A niche is about positioning.
A niche will help you position yourself within the target audience you have chosen and will allow you to compete more effectively for their business.
Let’s look at a real life example.
In the fast-food industry, there are a couple of major players who are aiming at the “sandwich eater” target audience. The big two in my area are Subway, and Quiznos.
These companies have chosen that audience to allow them to compete in the fast-food market without having to go up against companies like Taco Bell, McDonalds and Pizza Hut.
Now in the Sandwich Eater’s target audience, each of them has chosen a particular niche to target.
Subway’s niche is people looking for low fat sandwiches.
Quizno’s niche are people who like hot toasted bread.
Both of them are aiming at the same target audience but each of them has chosen a different niche to concentrate on. This allows each to compete effectively against the other. Subway owned the sandwich market for a very long time, but Quizno’s found a way to get into the business without competing directly with the leader.
Now, let’s say you opened a new sandwich shop – Small Town Hero. It isn’t doing very well. Why? I cannot figure out why I would buy my sandwiches from instead of from the other guys. They have chosen a target audience, sandwich eaters, but instead of marketing to a niche, they are marketing to everyone.
Needless to say, your sandwich shop want stay open very long. Not choosing a niche and marketing specifically to it, will kill your ability to compete.
Other niche examples:
Federal Express’ Target Audience is businesses who need package delivery. Their Niche is Overnight Delivery.
Southwest Airlines’ Target Audience is people who fly. Their niche is the low budget flyer.
Each of these companies competes in a segment of the marketplace that has a lot of competition, but focuses most of its marketing efforts on a portion.
In your niche, you are the expert.
Your niche is the specific area in your target audience where you will position yourself as the expert. Choosing a niche allows you to focus on a specific piece of the target audience and make it your own. And this is the best way to compete against your competition.
Small businesses have a definite advantage in niche marketing. Small business can survive; in fact thrive, in niches too small for big business to take seriously. HP would never think of building computers aimed specifically at females who are microbiologists, but you could and be successful. That is, if there were enough female microbiologists who needed computers in your area!
Choosing a niche stretches your marketing budget.
Positioning yourself or choosing the correct niche is also a great way to reduce your marketing costs. Jackie the Accountant decided to target restaurants as her niche, rather than focus on all businesses. This allows her to send fewer postcards to a more targeted audience and position herself as an expert in restaurant accounting.
Instead of marketing to the world, Jackie will market only to people who need her service (her target audience) and to better compete against other accountants, she will focus on the restaurant niche.
A niche also allows you to test new marketing tools before you roll them out to your entire target audience. If they are successful with a niche, then with minor modification they may also be successful for the entire target audience.
Things to do when choosing a niche:
* Determine the profitability of the niche. Many niches within your target audience may be too well defined to provide a decent return on your marketing investment. Just because no one is marketing to that niche, doesn’t mean that it is a worthwhile target.
* Test your product for acceptance within that niche. The niche may exist, but does your product or service meet their needs or is there even a desire for the product?
* Market to their hot buttons. Don’t just assume that you can find a niche and do the same old marketing. Spend the time to determine the best way market to them. Like choosing your target audience, defining a niche in that audience allows you to target and personalize your marketing efforts.